Fuel prices back to Sh98 a litre in Nairobi

February 14, 2011 12:00 am

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By , NAIROBI, Kenya, Feb 14 – Fuel pump prices have gone up by Sh2.40 to Sh98.08 in Nairobi after the Energy Regulatory Commission (ERC) adjusted the maximum prices in line with price control regulations.

The maximum pump price for diesel has now been capped at Sh91.71 up from the retail price of Sh88.71 that was being charged in the last one month.

"Motorists in Mombasa will in the next one month beginning Tuesday buy super petrol at Sh94.93, which will be the lowest amount while those residing in Mandera will pay the highest rate at Sh109.62," a statement from ERC indicated.

The regulator said the increase reflects a 9.5 percent rise in the average cost of imported super petrol from $862.73 per metric tonne in December 2010 to $944.62 per metric ton in January 2011.

The \’Free On Board\’ price for Murban crude oil lifted in January this year was posted at $95.55 per barrel, an increase of four percent from $91.85 per barrel in December last year.

The commission said that while international crude prices have been on an upward trend since July last year, the political instability being experienced in North Africa had continued to exert pressures on them as well.

"When the impacts of the above changes are incorporated in the formula for calculating the maximum retail pump prices the overall effect is an increase of between Sh0.94 and Sh3.00 per litre, for the products under review, from the prices published last month," said Director General Eng Kaburu Mwirichia.

Although the rate is approximately Sh2 less than the Sh100 per litre that had been projected, fuel prices will most likely hit this mark next month if the international oil prices continue to rise.

This state of affairs has in turn raised concern from consumers who argue that the price controls are not working in their favour.

In a statement, the Consumer Federation of Kenya (COFEK) said consumers have not enjoyed the cushionary reserves that they had been made to believe would help keep the erratic fuel pricing under check.

"We have learnt, with concern, of the continued monthly increment of fuel prices even after the Energy Minister Kiraitu Murungi and the Energy Regulatory Commission publicly pledged a reasonable price capping and one that did not necessarily amount to price controls. That the Sh100 per litre mark is about to be hit is no good news at all," said the Federation\’s Communications Officer Bernard Muinde.

The current development, they said confirmed the failure of the National Oil Corporation of Kenya to stabilise prices even after it was offered a 30 per cent monthly oil supplies quota by the government.

"Clearly, the development confirms the earlier market fears and concerns on the very low capacity of Nock to perform the task expected of it. The fact that Nock controls a paltry four percent of the market confirms that proper procedures were not followed in affording the very high quota to Nock," Mr Muinde further charged.

The federation now wants the Prime Minister Raila Odinga to intervene by immediately revoking the legal notice through which the Ministry of Energy \’irregularly\’ and \’uncompetitively\’ allocated Nock a 30 per cent petroleum procurement quota. They also want him to set up a joint ministerial standing committee to address the perennial challenge of unpredictable fuel pricing.

"We want him to enhance serious and real competition within Kenya\’s fuel industry by creating a more enabling environment for the indigenous oil marketers and attracting more foreign direct investments within the sector," the federation added.

At the same time, they have appealed to the Matatu Owners Association and its Welfare counterpart to be reasonable in reflecting any upward adjustment in commuter fares following the increment.